There are commodity markets for almost all kinds of important metals like gold bullion marketsilver, copper, iron etc. A large number of cash contracts are executed outside the companies.
Banks make advances against stock of raw materials, finished products, etc. There are rules and regulations for membership depending on the constitution of the association. The commodity exchanges render many useful functions to the business community as a whole and specially to the dealers in the specific commodities.
Commodity markets can be further classified into: According to the nature of commodities: A commodity market or a commodity exchange can be defined as an organisation or association which has a place where trading in same selected commodity or commodities is carried on under some fixed rules and regulations and among members only.
The commodity markets, therefore, have the characteristics of organised markets. The cash contracts are, therefore, also known as ready delivery contracts. It is an executed contract like any other contract of sale.
This is the most canton farm of cash contract. Those rules permit future trading including speculation. This is essential for taking decisions in the business world. If there is any dispute, it is settled by arbitration and for that there is a special sub-committee in the exchange.
In every market there are rules fear transactions as well as rules for membership. The percentage is fixed by the authorities of the exchange. There is no need of actual or physical delivery, nor there is need of actual payment.
Once the parties agree to such contract they cannot fall back, b Forward contracts: Under cash contracts there are genuine transactions of buying and selling with full delivery of goods and full payment of price.
In India we have all these types of markets. Characteristics of Commodity Market: Classification of Commodity Market: In the farmer group come jute, cotton, metals etc.
Cash contracts can be further classified into two categories: Functions of Commodity Market: In some commodity markets only cash contracts are executed but generally commodity markets are future markets.
To the business community: According to the nature, of their objects: Types of Transactions in Commodity Markets: Commodity markets dealing in agricultural products are also known as produces exchanges. In such a market a number of type of commodities are traded. Commodity markets may be profit-sharing or non-profit sharing among their members.
Every market sets up rules as regards the time within which the delivery has to be completed. Transactions take place by way of adjustments under the rules and regulations of the market.
These are also known as physical contracts as physically the goods are delivered. Those carnality markets which deal in commodities of international importance provide opportunities for exportable markets. Thus it is to be observed that there is a great difference between forward contracts and futures contracts.
The characteristics of a commodity exchange are: This is not common. Services Rendered by Commodity Market: There are organised markets for manufactured or semi-manufactured goods also like cotton goods, jute goods, wool, hides and skins, sugar etc.
On the whole a commodity market is a kind of organised market. A commodity market provides a definite place where the traders can do their transactions under some standard rules and regulations.Narender L Ahuja () in his research on “Commodity Derivatives market in India: Development, Regulation and Future Prospective”, concluded that Indian commodity market has madeenormous progress since with increased number of modern commodity exchanges, transparency and.
Commodity market is an important constituent of the financial markets of any country. It is the market where a wide range of products, viz., precious metals, base metals, crude oil, energy and soft commodities like palm oil, coffee etc.
are traded. It is important to develop a vibrant, active and liquid commodity market. Today, the Indian commodity market is worth INRCrores in the cash segment. The country is looking at a possible commodity futures market worth INR 4, Crores2.
2 Literature Review A review of the existing literature on the subject reveals the following. The research papers were accessed from authoritative sources. entity either because of underlying market failures or due to heavy government interventions in commodity markets.
This situation began to change with the onset of the structural adjustment programs in the s and the early s, which involved liberalization of commodity markets and dismantling of marketing boards.
Essays, Research Papers and Articles on Business Management Huge Collection of Essays, Some of them are of international character, e.g. tea market in India. Commodity markets dealing in agricultural products are also known as produces exchanges.
ADVERTISEMENTS: (b). "Objectives Of Commodity Market In India" Essays and Research Papers. Objectives Of Commodity Market In India.
Study on Commodity Market - September 8th, A study on Market Research Report: India Hearing Impairment Market.Download